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 very city in the region has "development
fees" as a source of income to pay for the costs of capital improvements
that will be needed as our populations increase in accordance with our General
Plans and current zoning. The average fees per single family, four bedroom,
two bath house in the region is approximately $20,000. However, no fees
for capital improvements are currently being collected to my knowledge for
: courts and jails, transportation, open space and recreation, health facilities,
social service facilities, etc. We need to establish "Region Wide Development
Fees." SANDAG predicts that there will be
an increase in population of 1,000,000 people within the next fifteen years.
Question: where will the money for the capital improvements to meet the
needs of the additional one million people come from? Current public policy
answers that question by expecting voters to pass bond issues, or have their
taxes increased in other ways, if they hope to maintain their quality of
life and protect their property values.
Perhaps it is time to change the
old ways of doing the people's business. We can simply expand the already
successful policy of making population growth pay its way by starting to
collect region-wide development fees from every city in the region. These
fees would be collected at the same time that we collect our respective
local city development fees.
We have a proven model that works
for cities, so lets expand it to the region. Further, we have a proven model
that works to administer those new fees. For almost ten years, SANDAG has
served as The Regional Transportation Commission to administer the half-cent
sales tax fees collected for transportation. I suggest that we establish
a "Regional Capital Improvement Commission" which should be SANDAG
to do the same work for other vitally needed infrastructure. As we continue
to collect development fees each time we issue a building permit in every
city, and at the county permit counters, we could collect an additional
fee to meet the needs of new courts and jails, new regional roads (the half
cent sales tax has a sunset clause), open space and recreational facilities,
health facilities, and other "to be defined" needed capital improvements.
To legally determine the fee rate,
the new regional fee should be within the law defined by AB 1600. SANDAG
should, as a regional body, first determine what our quality-of-life standards
are going to be at the regional level (i.e., the number of courts and jails
per 1,000 population, level of service on our regional roads, open space
and recreational acreage per capita, etc). Once these standards are defined
and agreed to regionally, our professionals can determine the revenue needed
to build the necessary capital improvements to keep up with the demands
of population growth. It will then be up to elected officials to run government
like a business and set public policies that will protect the quality of
life of our existing residents and businesses as we continue to absorb the
predicted population growth. This can be done without continuing to ask
existing voters to pass new bond issues or increase their sales taxes, gas
taxes, or other taxes.
I acknowledge that this is easier
to say than to do. There are significant opposing forces that want to maintain
the status quo that spreads the cost of population growth over the existing
tax payers. They are primarily the landowners and developers who have significant
land holdings. Development interests continue to claim that "development
fees" are passed on to the home buyer and therefore the price of housing
is increased by such fees. This is a myth. It is true that "development
fees" cost someone; but it is not primarily the home buyer, contrary
to popular belief. Consider the following questions and (answers):
1. Does the market place determine
the price of housing? (Yes.)
2. In a free enterprise society,
do developers sell their finished product for whatever price the market
will allow? (Yes)
3. If there were zero development
fees, would developers still sell their product for what ever the market
would allow? (Of course.)
4. There are five components of housing
costs:
1. Cost of material
2. Cost of labor
3. Profit, and overhead
4. Development Fees
5. Cost of land
If material, labor, profit, and fees
are the basic market-driven costs, what will an increase in "Development
Fees" do to the value of raw land? (Lower it.)
5. So, isn't it true that the person
who owns the raw land is ultimately the one who will absorb most of the
cost of development fees? (Yes, unless the developer was a bad business
person and overpaid for the land!)
6. Do you believe, therefore, that
we should change the way we pay for capital improvements by collecting "development
fees" up front rather than waiting for schools, roads, courts, jails,
etc. to become overcrowded and then asking all tax payers to increase their
taxes to "catch up," even if this means that it will decrease
the value of raw land? (If you value your quality of life and your property
value and want to minimize your taxes, the answer is YES! If you own raw
land and want to get the most profit possible from your land the answer
is NO!)
The above policy would make population
growth pay its own costs in a more equitable manor. There is no moral or
ethical problem placing the costs of future capital improvements on raw
land owners, in my opinion; land is not worth what the market has valued
it at due to the out-of-date public policies we now have in place. If we
were not drastically increasing our population, existing policies would
be sufficient. But when we realize we must plan to add another population
increment equal to the size of the city of San Diego in this region within
the next fifteen years, we need to update our policies.  |
